Governmental Affairs News

Friday, May 22, 2015
Happy Memorial Day Weekend!

House approves bill pre-empting local wage/benefit ordinances

The House approved legislation Wednesday designed to protect private businesses from a patchwork of local labor laws by a slim 57-52 vote. The bill, HB 4052, drew controversy in the House Commerce and Trade Committee from local units of government pushing back on what they saw as an infringement on local control and also from groups supporting particular workplace benefits like paid sick leave and higher wages. The committee managed to hold two weeks of testimony despite several loud outbursts by guests. MRA had planned to testify in support of the legislation, but time ran out and the committee needed time to address amendments before the vote.

The bill as reported by the committee included a clarification to allow local units of government to continue adopting and enforcing anti-discrimination laws that protect the LGBT community. The House took quick action on the legislation, holding a vote the day after the bill came out of committee. MRA spoke with numerous legislators on the issue and was pleased to see quick action.

A similar bill was introduced in the Senate on Tuesday as SB 337. Both SB 337 and HB 4052 were referred to the Senate Michigan Competitiveness Committee and are expected to come up for consideration soon.

House pitches alternative roads plan
House Republicans introduced an alternative roads plan last week after voters’ crushing defeat on May 5 of Proposal 1. The legislation was referred to a new committee created specifically to handle the delicate issue: the House Roads and Economic Development Committee. The bills include some pieces of the original plan that were tied to Proposal 1’s success: competitive bidding and road warranties. They would also look to reprioritize existing funds and adjust registration fees for electronic vehicle owners to pay for the much-needed infrastructure repairs.

Overall, the plan compiles $1.05 billion in funds for road and infrastructure repairs. Most of the funding ($700 million) for the plan comes from the state’s $9.5 billion general fund, which is made up of non-restricted funds not dedicated for any specific purpose. Much of the state’s $52.1 billion in revenue is made up of restricted funds dedicated to education, local governments, public health and various other government functions. The plan does utilize some restricted funds, $185 million, and recognizes $162 million in “tax fairness” through eliminating the Earned Income Tax Credit, creating diesel fuel parity and increasing registration fees for electronic and hybrid vehicles.

Breaking down the plan:

  • HB 4605 earmarks a portion of the Income Tax revenue annually to the Michigan Transportation Fund.

  • HB 4606 earmarks any leftover revenue not subject to a specific allocation to the Transportation Fund (15% of the 4 cents per dollar goes to local governments, 60% goes to schools, and currently only 27.9% of the remaining 25% percent collected from the Sales Tax on motor fuel goes towards the Transportation Fund).

  • HB 4607 would shift $75 million of tobacco settlement revenue that is currently dedicated to the 21st Century Jobs Fund, a fund dedicated to economic development, to the Michigan Transportation Fund

  • HB 4608 would amend the Michigan Strategic Fund Act to earmark $60 million from Indian Gaming Compact receipts that currently goes to the Michigan Economic Development Corporation for the Michigan Transportation Fund, to be distributed as described below. This annual earmark would begin in Fiscal Year 2015-2016. 

  • HB 4609 eliminates the 6% Earned Income Tax Credit for low-income individuals, which costs the state approximately $117 million annually.

  • HB 4610 requires competitive bidding on road projects (same language as Enrolled House Bill 4251 of 2014, part of the original 2014 roads plan).

  • HB 4611 requires local road commissions to use competitive bidding on all projects that cost more than $100,000.

  • HB 4612 increases registration fees for electronic vehicles by $225 for light vehicles and $400 for heavier vehicles (more than 8,000 lbs) and increases fees for hybrid electric vehicles by $100 for a lighter vehicle and $200 for a heavier vehicle. This would generate approximately $5 million annually.

  • HB 4613 requires road builders to provide road warranties (similar to Enrolled House Bill 5460 of 2014, part of the original 2014 roads plan).

  • HB 4614 would create “diesel parity,” bringing the tax on diesel fuel to 19 cents per gallon, and index fuel taxes to inflation to generate $40 million annually.

  • HB 4615 would create “diesel parity” bringing the tax on diesel fuel from 15 centers per gallon to 19 cents per gallon and index fuel taxes to inflation using the Detroit Consumer Price Index. The inflationary trigger would increase fuel taxes by the increase in the CPI or by 5%, whichever is less. The bill also includes a tax equal to the tax on diesel fuel per diesel equivalent gallon for alternative fuels, including compressed natural gas, hydrogen, hydrogen compressed natural gas and liquefied natural gas.

  • HB 4616 eliminates the flat tax rate on motor carrier fuel taxes and establishes an 18-month period for filing any filling refund claims.

While it was refreshing to see a plan materialize, the governor and Senate met the plan with some reservations. Gov. Snyder expressed some reservations with the House Republicans’ plan, since it relies in part on future revenue growth, but said he was open to considering the plan and pleased to see legislators proposing and considering an alternative. At this point, the Senate has yet to introduce an alternative roads plan, but has stated its willingness to stay all summer to develop and pass a plan. Democrats were also disappointed in the House Republicans’ plan because it eliminates the Earned Income Tax Credit, and they feel it shifts the burden to low-income individuals.

The House Roads and Economic Development Committee began hearing testimony on pieces of the plan Thursday. Committee Chairman Rep. Jeff Farrington (R-Utica) said he hopes to vote the entire plan out of committee within a month.

Other important items to note:

  • E-cigarette ban – Legislation to regulate the sale and use of e-cigarettes by minors (SB 231) passed the Senate on Wednesday. The bill would add e-cigarettes or vapor products to the signage that is already required by existing law under the Youth Tobacco Act.

  • GMO labeling – Resolutions urging Congress to pass legislation establishing a uniform, scientifically based label program for genetically modified food (GMOs) were introduced in the House and Senate this week as HR 89 and SR 59. The resolutions were referred to the House and Senate Agriculture Committees.

  • Liquor at motor fuel pumps – Legislation to allow a grocery store with motor fuel pumps to sell beer, wine, and liquor under a secondary location permit was introduced on Wednesday as SB 344-345. The bills were referred to the Senate Regulatory Reform Committee.

  • Powdered alcohol ban – Legislation banning the sale of powdered alcohol passed the Senate on Wednesday. The legislation, SB 240, has bipartisan support and passed almost unanimously last year. The language was stripped out of the bill last year before the governor signed it. The bill was referred to the House and Senate Regulatory Reform Committees.

  • SDM license merchants with gas pumps – Last week the House approved legislation (HB 4074) that would eliminate the inventory requirement for specially designated merchants (SDM) licensees or applicants who are located in a township with a population density of less than four people per square mile within a county with a population density of less than 11 people per square mile. The legislation primarily impacts retailers located in the Upper Peninsula.

  • Notices for strike replacement workers – Legislation to repeal the required advertising notice for replacements for striking workers was introduced on Wednesday as HB 4630 and referred to the House Commerce and Trade Committee.

  • Prevailing wage – Last week, the Senate passed legislation that would repeal the state’s existing prevailing wage law (SB 1-3). Since Gov. Snyder has indicated in the past he would veto a repeal, supporters of the repeal announced this week that they would seek to change the law through an initiative petition. Initiated laws can be enacted by the legislature or by the people at the next general election. The governor cannot veto an initiated law. MRA has not taken a position on prevailing wage.

  • Animal adoption "Logan's Law": The House Judiciary Committee approved legislation to prohibit animal abusers from adopting animals (HB 4353 and 4355) last week. The bills require animal shelters or animal protection agencies, before finalizing a pet adoption, to check a statewide database of individuals convicted for animal abuse crimes. The legislation includes language MRA worked on last year to exempt pet shops that allow adoption events on-site from the database-checking requirement. 

  • Pet health standards - Legislation cracking down on puppy mills by setting standards for large kennels and organizations that adopt or sell pets (SB 339) was introduced on Tuesday and referred to the Senate Commerce Committee. The bill creates additional record-keeping requirements, health standards and living conditions for dogs, cats and ferrets.


  • Over-the-counter medicationsHB 4464-4465, which would exempt over-the-counter medication from the state’s sales tax, was approved by the House on May 12. The bills were referred to the Senate Finance Committee.

  • Air guns - BB guns, paintball guns and other types of air guns will no longer be classified as firearms under HB 4151-4156, 4160, 4161 and SB 85 which Gov. Snyder signed into law as Public Acts 21-29.

  • Patent reform – Last week, the Senate Judiciary Committee held a hearing on SB 289, legislation aimed at stopping bad-faith patent infringement, or patent trolls. The bill would require the courts to force a person who is found to have made a bad-faith assertion of patent infringement to post a bond in an amount equal to a good-faith estimate of the target's costs to litigate the claim.

  • Prohibit state contracts with companies that collect electronic data – Legislation that would prohibit the state from entering into any contracts with companies that collect electronic or metadata without informed, consumer consent was introduced on Tuesday as HB 4619. The bill was referred to the Committee on Government Operations. Bills that have no chance of moving are often referred to that committee to die.

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